Nick Timothy

Some in Brussels want to wreck any chance of a deal

What does Britain want from the Brexit negotiations? That is the question we regularly hear from EU negotiators and those in this country whose pro-european views often put them on the side of Brussels, rather than Britain.

In fact, what Britain seeks is clear. What the EU is looking for from our future relationship, however, is less clear, just as important, and rarely discussed. Since European leaders have suggested they are almost ready to start the second stage of talks, we should ask what they actually want.

The British want to respect the referendum result, and leave the EU entirely. The Government does not seek halfway-house options that would mean accepting the jurisdiction of the European Court of Justice in Britain, the supremacy of European law, the continuation of free movement and vast annual payments to Brussels. Nor does it propose anything that would prevent Britain from negotiating new trade deals beyond Europe.

Instead, the Government seeks a “deep and special partnership” with the EU. This would involve close cooperation on both economic and security matters. At its heart would be a free-trade agreement “of greater scope and ambition than any before it”, covering goods and services including network industries such as aviation, energy and telecoms, and financial services.

This is a complex undertaking but the two sides start from a position of regulatory equivalence. The toughest issues to agree will be about how to resolve disputes, and how to sensibly align our regulatory systems while still allowing room for divergence. These are difficult challenges, but they are not, with goodwill, insuperable.

But what do the Europeans want? We know that the member states want a deal. We know this because they need Britain’s money, to be paid through the so-called divorce bill. We know, too, that for all the controversy about planning for a no-deal outcome in Britain, there is no sign of contingency planning taking place on the European side.

We also know that, increasingly – and far more quietly on the continent than here at home – businesses and politicians are putting pressure on their governments to ensure there is a deal that allows trade to continue. In recent months, German industrialists have been discreetly lobbying the chancellery to ensure that the talks reach their second stage promptly. So have their counterparts in countries including Belgium, Italy and the Netherlands. Governments of countries for which Britain is an especially important trading partner – such as Denmark, Ireland, Italy, the Netherlands, Spain and Sweden – are pushing for talks to move on to the future trade deal.

This is why the EU’S national governments were angry when a German newspaper was briefed about Theresa May’s private conversation with Jean-claude Juncker over dinner last week. The briefing, apparently from European Commission sources, was inaccurate, highly personal and designed to rupture trust. The finger was pointed at Martin Selmayr, Juncker’s chief of staff, a self-styled hard man and federalist zealot. But the displeasure directed at Selmayr has not only come from member states: Michel Barnier, responsible for negotiating on behalf of the Commission, despises him and believes he is trying to wreck the chances of Britain and the EU reaching a sensible agreement.

But for those Europeans who want a trade deal, what would one look like? The most important thing for the EU is that nothing that undermines the single market or the eurozone can be agreed. That is why they insist that Britain cannot have all the benefits of EU membership without any of the costs.

This is not unreasonable, and it is why Britain has been keen to show we are not trying to “cherry pick” the EU’S rights and obligations. Theresa May has pointedly said Britain does not seek single market membership because she understands that its rights and obligations – which include free movement – are indivisible. She accepts, therefore, that Britain will have no say over the rules that govern trade inside our biggest export market.

Beyond this, though, what do the Europeans want? On all the important questions – whether services should be included in a trade agreement, whether they will accept a new UK/EU forum for resolving disputes, whether free trade will be made conditional on political factors such as the absence of immigration controls – we know what Britain would like, but we do not know what the Europeans envisage.

This may be a good thing, since it means there will be room for the Europeans to be pragmatic.

But at some point we will need to know whether the EU agrees with Britain’s proposed deep and special partnership. If it does, and the terms are reasonable, Britain has said it will meet its liabilities. But if there is no deal, London must not pay up.

In the meantime, Britain must stick with its strategy: engage constructively, prepare for no-deal, but not walk away from the talks just as they start to get interesting.